Wall Street sees funding hurdle to Musk's plan to take Tesla private

In a statement on Tesla's website on Wednesday, six of Tesla's nine directors said the board had met several times over the last week to discuss such an idea and was "taking the appropriate next steps to evaluate this".

"Having complex stakeholders is great", Farley said in response to a question about being public vs. private from FoxNews.com Automotive Editor Gary Gastelu at Ford's headquarters in Dearborn, Michigan. The transaction would amount to the largest leveraged buyout - in which a company borrows money to repurchase shares and exit the public market - of all time.

He set a target stock price of $420 a share and said he had investors lined up to purchase the company at that price.

"We've been in existence for over 100 years-we've always had complicated stakeholders - and that's what makes our company great and vibrant", he said.

Musk is Tesla's biggest shareholder, with a almost 20% stake. Company share prices, particularly in deals as giant as this one, are nearly always decided by corporate executives, board members or consultants who review market data and optimize for maximum value.

Going private is one way to avoid close scrutiny by the public market as Musk and the company face those challenges.

Musk has downplayed the power of the tweets he launches at all hours to his 22 milion Twitter followers: "My tweets are literally what I'm thinking at the moment, not carefully crafted corporate bs, which is really just banal propaganda", he said in June.

The company also remains unprofitable and going private wouldn't change that. Musk has feuded publicly with regulators, critics, short sellers and reporters, and some analysts suggested that less transparency would be welcomed by Musk. And Musk is correct that Tesla has attracted a large number of short sellers - investors who profit by betting on a stock's decline.

Tesla shares fell as much as 3.4 per cent to US$366.52 before the start of regular trading, though they pared declines after the board statement.

Harvey Pitt, a former chair of the Securities and Exchange Commission, said Musk's asserting a final sale price and that funding was "secured" opened him to potential charges of stock manipulation or securities fraud.

"This proposal to go private would ultimately be finalized through a vote of our shareholders", Musk said in explaining the potential move.

Tesla said on Wednesday the discussions had addressed the issue of how to fund such a deal, but gave no details. He followed up the tweet with an email to Tesla employees saying that he thought "the best path forward" would be to take Tesla private. The company already has a $2 billion investment from Saudi Arabia's sovereign fund as well as Tencent, which took a 5 percent stake in 2017. Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot.

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